SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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(MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002 or
 [  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO  _____________
Commission file number 0-12254



SCIENTIFIC TECHNOLOGIES INCORPORATED



|Oregon                                                         | 77-0170363                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

6550 Dumbarton CircleFremont, CA     94555

(510) 608-3400







Check whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.    YES [X] NO [   ],

Common stock outstanding as of July 31, 2002 was 9,681,810 shares.









SCIENTIFIC TECHNOLOGIES INCORPORATED

                           Quarter Ended June 30, 2002
                                     INDEX



|PART I.   Financial Information                                                                                       | Page No.
|--------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                      |         
|Item 1.   Financial Statements
                  (unaudited):                                                         |         
|                                                                                                                      |         
|Consolidated Balance Sheets as of
          
     June 30, 2002 and December 31, 2001                                 | **      
|                                                                                                                      |         
|Consolidated Statements of Operations for the
          
    Three and Six Months ended June 30, 2002 and 2001        | **      
|                                                                                                                      |         
|Consolidated Statements of Cash Flows for the
          
    Six Months ended June 30, 2002 and 2001                  | **      
|                                                                                                                      |         
|Notes to Consolidated Financial Statements                                                                            | **      
|                                                                                                                      |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | **      
|                                                                                                                      |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                  | **      
|                                                                                                                      |         
|PART II.  Other Information                                                                                           |         
|                                                                                                                      |         
|Item 4.   Submission of Matters to a Vote of Security Holders                                                         | **      
|                                                                                                                      |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                            | **      
|                                                                                                                      |         
|Signatures                                                                                                            | **      

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PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

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SCIENTIFIC TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEET(Unaudited, in thousands excepet for share data)

|Assets                                   | Jun. 30, 2002 | Dec. 31, 2001
|---------------------------------------- | ------------- | -------------
|Current assets:                          |               |              
|Cash and cash equivalents                | $ 1,282       | $ 1,033      
|Accounts and notes receivable, net       | 7,257         | 6,454        
|Inventories                              | 8,616         | 9,125        
|Deferred income taxes                    | 2,081         | 2,081        
|Other current assets                     | 1,017         | 531          
|Total current assets                     | 20,253        | 19,224       
|                                         |               |              
|Intangible assets                        | 10,738        | 11,389       
|Property and equipment, net
Other assets | 3,665
50      | 3,537
50     
|Total assets                             | $34,706       | $34,200      

Liabilities and Shareholders' Equity

|Current liabilities:      |        
|------------------------- | -------
|Accounts payable          | $ 2,036
|Accrued expenses          | 3,048  
|Total current liabilities | 5,084  
|Long-term liability       | 432    
|Total liabilities         | 5,516  

Shareholders' equity:

|Common stock; $.001 par value; 100,000 shares authorized; 9,675 and 9,676 shares issued
and outstanding | 10      | 10     
|------------------------------------------------------------------------------------------------------- | ------- | -------
|Capital in excess of par value                                                                          | 5,657   | 5,637  
|Retained earnings                                                                                       | 23,523  | 23,587 
|Total shareholders' equity                                                                              | 29,190  | 29,234 
|Total liabilities and shareholders' equity                                                              | $34,706 | $34,200

The accompanying notes are an integral part of these
financial statements.

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SCIENTIFIC TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(Unaudited, in thousands, except per share data)



|                                                                             | For the three months ended
|---------------------------------------------------------------------------- | --------------------------
|                                                                             | Jun. 30, 2002             
|                                                                             |                           
|Sales                                                                        | $12,653                   
|                                                                             |                           
|Cost of goods sold                                                           | 7,047                     
|                                                                             |                           
|Gross profit                                                                 | 5,606                     
|                                                                             |                           
|Operating expenses:                                                          |                           
|Selling, general and administrative                                          | 3,952                     
|Research and development                                                     | 1,241                     
|Amortization of intangible assets                                            | 190                       
|Total operating expenses                                                     | 5,383                     
|                                                                             |                           
|Income (loss) from operations                                                | 223                       
|                                                                             |                           
|Interest and other income, net                                               | 7                         
|                                                                             |                           
|Income (loss) before income taxes                                            | 230                       
|                                                                             |                           
|Provision for (benefit from) income taxes                                    | 87                        
|                                                                             |                           
|Net income (loss)                                                            | $143                      
|                                                                             |                           
|Net income (loss) per common share:                                          |                           
|Basic and diluted                                                            | $ 0.02                    
|                                                                             |                           
|Shares used to compute net income (loss) per common
share:
Basic and diluted | 9,679                     

The accompanying notes are an integral part of these financial
statements.

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SCIENTIFIC TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(Unaudited, in thousands, except per share data)



|                                                                    | For the six months ended
|------------------------------------------------------------------- | ------------------------
|                                                                    | Jun. 30, 2002           
|                                                                    |                         
|Sales                                                               | $23,701                 
|                                                                    |                         
|Cost of goods sold                                                  | 13,390                  
|                                                                    |                         
|Gross profit                                                        | 10,311                  
|                                                                    |                         
|Operating expenses:                                                 |                         
|Selling, general and administrative                                 | 7,581                   
|Research and development                                            | 2,490                   
|Amortization of intangible assets                                   | 353                     
|Total operating expenses                                            | 10,424                  
|                                                                    |                         
|Loss from operations                                                | (113)                   
|                                                                    |                         
|Interest and other income, net                                      | 9                       
|                                                                    |                         
|Loss before income taxes                                            | (104)                   
|                                                                    |                         
|Benefit from income taxes                                           | (40)                    
|                                                                    |                         
|Net loss                                                            | $(64)                   
|                                                                    |                         
|Net loss per common share:                                          |                         
|Basic and diluted                                                   | $(0.01)                 
|                                                                    |                         
|Shares used to compute net loss per common
share:
Basic and diluted | 9,672                   

The accompanying notes are an integral part of these financial
statements.

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SCIENTIFIC TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(Unaudited, in thousands)



|                                                                            | For the six months ended
|--------------------------------------------------------------------------- | ------------------------
|                                                                            | Jun. 30, 2002           
|Cash flows from operating activities                                        |                         
|Net loss                                                                    | $ (64)                  
|Adjustments to reconcile net loss to cash
provided by operating activities: |                         
|Depreciation and amortization                                               | 1,317                   
|Changes in assets and liabilities                                           |                         
|Decrease (increase) in accounts receivable                                  | (803)                   
|Decrease (increase) in inventories                                          | 509                     
|Increase in other assets                                                    | (486)                   
|Increase (decrease) in accounts payable                                     | 150                     
|Increase in payable to Parent                                               | --                      
|Increase (decrease) in accrued liabilities                                  | 400                     
|Cash flows provided by operating activities                                 | 1,023                   
|                                                                            |                         
|Cash flows from investing activities                                        |                         
|Purchase of property, plant and equipment                                   | (794)                   
|Net cash used in connection with the acquisition of
Dunn Sales, Inc.        | --                      
|Sale (purchase) of short-term investments                                   | --                      
|Cash flows used in investing activities                                     | (794)                   
|                                                                            |                         
|Cash flows from financing activities                                        |                         
|Dividends                                                                   | --                      
|Issuance of common stock                                                    | 20                      
|Cash flows provided by (used in) financing activities                       | 20                      
|                                                                            |                         
|Change in cash and cash equivalents                                         | 249                     
|                                                                            |                         
|Cash and cash equivalents at beginning of period                            | 1,033                   
|Cash and cash equivalents at end of period                                  | $1,282                  



The accompanying notes are an integral part of these financial
statements.

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SCIENTIFIC TECHNOLOGIES INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The accompanying condensed consolidated financial
statements for the three and six months ended June 30, 2002 and 2001 are
unaudited. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States of America for interim financial information and
in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-
X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles in the United States of
America for complete financial statements. In the opinion of management, the
unaudited condensed consolidated financial statements reflect all adjustments,
consisting only of normal recurring adjustments, considered necessary to present
fairly the financial position, results of operations and cash flows of
Scientific Technologies, Inc. (the "Company") and its subsidiaries for all
periods presented.

To prepare these condensed consolidated financial
statements in conformity with generally accepted accounting principles,
management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.

The results of operations are not necessarily indicative
of the results to be expected in the future or for the full fiscal year. It is
recommended that these condensed consolidated financial statements be read in
conjunction with the Company's consolidated financial statements and the notes
thereto included in its 2001 Annual Report on Form 10-K.

1. INVENTORIES

Inventories consist of the following:	 	 (In thousands)

|                | Jun. 30, 2002 | Dec. 31, 2001
|--------------- | ------------- | -------------
|Raw materials   | $5,026        | $5,665       
|Subassemblies   | 732           | 1,042        
|Work in process | 1,060         | 475          
|Finished goods  | 1,798         | 1,943        
|                | $8,616        | $9,125       
|                |               |              

2. NET INCOME (LOSS) PER SHARE

A reconciliation of the numerators and denominators used to
compute basic and diluted income (loss) per common share is provided below.



|                                                                                                                    | (In thousands) |       
|------------------------------------------------------------------------------------------------------------------- | -------------- | ------
|                                                                                                                    | Income (loss)  | Shares
|Three months ended June 30, 2002                                                                                    |                |       
|Basic earnings per share calculation                                                                                | $ 143          | 9,675 
|Effect of dilutive securities
      Stock options                                                                   |                | 4     
|Diluted earnings per share calculation                                                                              | $ 143          | 9,679 
|Three months ended June 30, 2001                                                                                    |                |       
|Basic and diluted loss per share calculation                                                                        | $ (959)        | 9,655 
|Total potential common stock excluded from
   the computation of loss per share as their
   effect was antidilutive |                | 50    



|                                                                                                                    | (In thousands) |       
|------------------------------------------------------------------------------------------------------------------- | -------------- | ------
|                                                                                                                    | Income (loss)  | Shares
|Six months ended June 30, 2002                                                                                      |                |       
|Basic and diluted loss per share calculation                                                                        | $ (64)         | 9,672 
|Total potential common stock excluded from
   the computation of loss per share as their
   effect was antidilutive |                | 8     
|Six months ended June 30, 2001                                                                                      |                |       
|Basic and diluted loss per share calculation                                                                        | $ (378)        | 9,653 
|Total potential common stock excluded from
   the computation of loss per share as their
   effect was antidilutive |                | 14    

3. COMPREHENSIVE INCOME (LOSS)

For the three and six months ended June 30, 2002 and
2001, there is no significant difference between net income (loss) and
comprehensive income (loss).

4. SEGMENT REPORTING AND OTHER INFORMATION

Financial information for each product is as follows: (in
thousands)



|                              | Three months ended
|----------------------------- | ------------------
|                              | June 30,          
|Safety Products               | 2002              
|Sales                         | $10,616           
|Group operating profit (loss) | 512               
|                              |                   
|Automation Products           |                   
|Sales                         | $ 2,037           
|Group operating loss          | (289)             
|                              |                   
|                              | Six months ended  
|                              | June 30,          
|Safety Products               | 2002              
|Sales                         | $19,897           
|Group operating profit (loss) | 611               
|                              |                   
|Automation Products           |                   
|Sales                         | $ 3,804           
|Group operating loss          | (724)             
|                              |                   
|                              | At                
|                              | Jun. 30           
|Total Assets                  | 2002              
|Safety Products               | $12,703           
|Automation Products           | 22,003            
|Total                         | $34,706           

The Company operates principally in the United States.
The Company's operations in Germany are insignificant to the Company as a whole.
Sales to foreign customers represented less than 10% of total sales in the three
and six month periods ended June 30, 2002.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This interim report on Form 10-Q contains trend analysis
and other forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such
statements include expectations, beliefs, intentions or strategies regarding
future operating results, future expenditures, future cash requirements, and
future industry conditions that involve risks and uncertainties. The Company's
actual results could differ materially from those projected in such forward-
looking statements as a result of many factors, including, without limitation,
those set forth under this section, the section entitled "Business Factors"
below and elsewhere in this report on Form 10-Q.

Results of Operations

(Amounts in thousands, except percentages)

Scientific Technologies Incorporated designs,
manufactures and distributes automation safeguarding and specialty sensor
products for the industrial control market. The Company's products include
safety light guards, profiling scanners, factory automation sensors, controls,
components, microcomputers, fiber optics, power monitoring devices, safety mats,
pressure, displacement and velocity transducers, digital pressure gauges and
comparators and other electronic equipment supplied to industrial automation,
commercial and defense customers.

Sales for the three months ended June 30, 2002 increased
9% to $12,653 from $11,581 in the comparable period in 2001. This was primarily
the result of increased sales by the Safety Products Group specifically light
curtains, vehicle scanners and sales associated with Dunn Sales, which was
acquired in June of 2001. These increases offset lower sales by the PSI-Tronix
operation, which continues to be negatively impacted by slow semiconductor
manufacturing markets. Sales for the six months ended June 30, 2002 declined 9%
to $23,701 from $25,904 in the same period in 2001. This was the result of the
softness of our markets in the first quarter of 2002.

Gross margin as a percentage of sales for the three and
six months ended June 30, 2002 was 44% compared to 35% and 41% for the
comparable periods in 2001. The improved margins were generally the result of
cost reductions begun in the second quarter of 2001.

Selling, general and administrative expenses for the
three and six months ended June 30, 2002 were reduced 7% to $3,952 and $7,581
from $4,249 and $8,190 in the same periods of 2001. The first half of 2002 was
positively impacted by the continuing cost reduction measures initiated in April
2001, which offset increased selling, general and administrative expenses
associated with the DSI operations. In addition, selling, general and
administrative expenses were negatively impacted in 2001 by a non-recurring
adjustment to the reserve for doubtful accounts. As a percent of sales for the
three and six month periods ended June 30, 2002, selling, general and
administrative expenses were 31% and 32% respectively compared to 37% and 32%
for the comparable 2001 periods.

Research and development expenses for the second quarter
and first six months of 2002 were reduced 3% and 10% to $1,241 and $2,490 from
$1,281 and $2,780 in 2001 comparable periods. This was also the result of the
above mentioned cost reductions. As a percent of sales for the three and six
months ended June 30, 2002, research and development expenses were 10% and 11%
respectively compared to 11% for the same periods of 2001.



Liquidity and Capital Resources

At June 30, 2002, our working capital increased 3% to
$15,169 compared to $14,690 reported at December 31, 2001. This was primarily
due to the improved operating results in the second quarter of 2002.

Available bank borrowings were $6,100, all of which were
unused at June 30, 2002. The Company believes that cash from operations,
together with its cash resources and available bank borrowings, will be
sufficient to fund its working capital requirements for the next twelve months.

Critical Accounting Policies

A discussion of our critical accounting policies is set
forth in our 2001 Annual Report on Form 10-K, which was filed with the
Securities and Exchange Commission on April 1, 2002, as amended. There were no
material changes in any of our critical accounting estimates or judgments during
the three and six months ended June 30, 2002.

Business Factors

Because of the variety of factors and uncertainties
affecting our operating results, past financial performance and historic trends
may not be a reliable indicator of future performance. These factors, as well as
other factors affecting our operating performance, may result in significant
volatility in our common stock price. Among the factors which could affect our
future business, financial condition or operating results are the following:

Our operating results may fluctuate.

We have experienced fluctuations in annual and quarterly
operating results and anticipate that these fluctuations will continue. These
fluctuations are caused by a number of factors, including the level and timing
of customer orders, fluctuations in purchases of complementary third party
products with which our products are sold, the mix of products sold and the
timing of operating expenditures. Our operating results have been, and could
continue to benegatively impacted by generally
adverse economic conditions throughout the high technology sector. In
particular, our PSI-Tronix subsidiary has experienced decreases in sales due to
the current market conditions in the semiconductor industry.

The seasonality inherent in our business could cause our operating results
to fluctuate.

The industrial manufacturing equipment industry in which
we compete has historically been subject to seasonality. This is also true with
respect to European markets in which we compete where business activity declines
due to vacations taken in the summer months. This seasonality, combined with
other factors such as the variability in our operating results described above,
renders quarter-to-quarter comparisons of our results of operations unreliable
as indicators of our overall performance.

The market for our products is highly competitive.

The market for industrial sensors is highly competitive.
Many competitors have substantially greater name recognition and technical,
marketing and financial resources than we have. Competitive pressures could
reduce market acceptance of our products and result in price reductions,
decreased revenues and increases in expenses.

Our business could suffer if we do not respond to technological change and
new product development demands of our customers.

The market for our products is characterized by changing
technology, evolving industry standards, changes in customer needs and new
product introductions. Our future success will depend on our ability to enhance
current products, develop new products and respond to emerging industry
standards, all on a timely and cost-effective basis. The introduction of new
products also requires that we manage the transition from older products in
order to minimize disruption of customer orders, avoid excessive levels of older
product inventories and ensure that adequate supplies of new products can be
delivered to meet customer demands.

Our sales are dependent on indirect distribution channels.

A majority of our sales are through third party
distributors, system integrators and original equipment manufacturers. These
resellers are not required to offer our products exclusively. We cannot assure
you that a reseller will continue to offer our products. In addition many of our
resellers are privately owned firms which may not be well capitalized. If our
ability to sell products through these third parties is impaired, our results of
operations would likely suffer.

Our international sales are subject to risks.

Our international sales may be disrupted by currency
fluctuations or other events beyond our control, including political or
regulatory changes. If our international sales were disrupted for any reason,
our revenue levels would decline.

Our business could suffer if we are unable to protect and enforce our
intellectual property rights.

We rely on a combination of patent, trademark and trade
secret laws and contractual restrictions to establish and protect proprietary
rights in our products and services. There can be no assurance that our patents,
trademarks, or contractual arrangements or other steps taken by us to protect
our intellectual property will prove sufficient to prevent misappropriation of
our technology or defer independent third party development of similar
technologies. Moreover, there can be no assurance that the technology licenses
granted to us from our parent company will continue to be available. The loss of
any of our proprietary technology could require us to obtain technology of lower
quality or performance standards or at greater cost, which could materially
adversely affect our business, results of operations and financial condition.
Furthermore, the laws of certain foreign countries may

not protect our products, services or intellectual property
rights to the same extent as do the laws of the United States.



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The market risk inherent in our investments represents
the potential loss arising from adverse changes in interest rates. We are
exposed to market risk in the area of interest rate changes impacting the fair
value of our investment securities. Our policy is to invest primarily in money
market accounts and short-term investments held at financial institutions. We do
not have any derivative instruments in our investment portfolio. Due to their
highly liquid nature, our investments are subject to minimal credit and market
risk.

PART II - OTHER INFORMATION



Items 1 - 3 and 5 are not applicable for this
reporting period.



Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Annual Meeting of shareholders held on May 23,
2002, the shareholders reelected the following to the Board of Directors,
Anthony R. Lazzara: 9,526,585 shares for, Joseph J. Lazzara: 9,529,978 shares
for, James A. Lazzara: 9,529,778 shares for, James A. Ashford: 9,529,808 shares
for, Carl H. Frei: 9,529,521 shares for, Bernard L. Ploshay: 9,529,346 shares
for and Richard S. Baldwinson: 9,527,996 shares for. The shareholders also
approved the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants by a vote of 9,533,880 shares for, 2,740 shares against
and 5,440 shares abstaining.



Item 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) The following documents are filed as a part of this Report:

|Exhibit 3.1 -   | Articles of Incorporation, as amended, are incorporated by reference to the
Registrant's Form 10-K for the year ended December 31, 1988, Exhibit 3.1.
|--------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 3.3 -   | By-Laws are incorporated by reference to the Registrant's Form 10-K for the
year ended December 31, 1985, Exhibit 3.                                 
|Exhibit 4.1 -   | 1997 Employee Stock Purchase Plan is incorporated by reference to the
Registrant's Registration Statement on Form S-8 dated October 2, 1998.         
|Exhibit 4.2 -   | 1997 Stock Plan is incorporated by reference to the Registrant's Registration
Statement on Form S-8 dated October 2, 1998.                           
|Exhibit 21.1 -. | Subsidiaries of the Registrant is incorporated by reference to the
Registrant's Form 10-K for the year ended December 31, 2001,	 Exhibit
21.1        
|Exhibit 24.1 -  | Power of Attorney is incorporated by reference to the Registrant's Form 10-K
for the year ended December 31, 2001, Exhibit 24.1.                     
|Exhibit 99.1 -  | Certification of Chief Executive and Chief Financial Officers                                                                                        





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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





SCIENTIFIC TECHNOLOGIES INCORPORATED
                  Registrant

|Date: August 13, 2002 |  | /s/Joseph J. Lazzara                                                                               
|--------------------- |  | ---------------------------------------------------------------------------------------------------
|                      |  | Joseph J. Lazzara                                                                                  
|                      |  | President and Chief Executive Officer
                  (Principal Executive and Financial officer)
|                      |  |                                                                                                    





|                      |  |                                                                                          
|--------------------- |  | -----------------------------------------------------------------------------------------
|Date: August 13, 2002 |  | /s/ Richard O. Faria                                                                     
|                      |  | Richard O. Faria                                                                         
|                      |  | Vice-President, Finance & Administration
                  (Principal Accounting Officer)

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